Clouds Gather Over Mideast Wireless Op

1/16/2000 7:00 PM Eastern

London -- Saudi Arabian wireless cable company
SARAVision/Al Rawaad is closing its offices here.

Liquidation proceedings on the unit, known as ARA
Programming & Distribution Ltd., began here last week. ARA is the London production
and compilation center for SARAVision, and it is responsible for creativity and the
assembly of four channels branded with the Al Rawaad name.

ARA CEO Ricki Ghai said the company's shareholders also
decided to close the Riyadh, Saudi Arabia, headend. Those shareholders include Middle East
Broadcasting Centre (MBC) owner Sheikh Walid al-Ibrahim, who is the brother-in-law of
Saudi Arabia's King Fahd.

"ARAs involvement in Riyadh will probably cease, but
high-level discussions are still taking place in Riyadh, with Sheikh Walid closely
involved, which might affect how the Riyadh end is handled," Ghai added.

Officially, Saudi Arabia has a ban on satellite dishes, and
SARAVision was the government-backed mechanism over which "sanitized"
multichannel TV could be delivered to the mass market.

ARA has been transmitting on a closed-circuit basis in
Riyadh for about two-and-a-half years, waiting for official authorization. The complete
project has been under way for about six years, and at one time, it claimed to be the
world's first wireless cable system covering a large country from coast to coast.

But the project has been plagued with technical and
political problems. Sheikh Walid and his co-investors have funded the project with a huge
sum, "and the likelihood of his seeing a return on that investment was looking
increasingly unlikely," one source said.

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